Senate Environment and Communications Legislation Committee, , 7:53:59 to 7:59:16
The CEO details efforts to manage geological risks, including advanced probing and dewatering technology for tunnel boring machines Monica and Florence in difficult zones.
Topics: Infrastructure, Renewable energy, Energy storage
Speakers: Dennis Barnes, Malcolm Roberts, Unknown Speaker
So another part, thank you. Another another part of a project is to assess the risk, not just the cost but the risk. What have you done since you came on board and what has the Albanese Bowen government done since it took over power in this country? What have you done to to understand the risks better? Have you done what geohysical drilling have you done in front of the front of the
tunnels? So the >> for example uh I mean Snowy Hydro is responsible for delivering this project. So the the first thing that we did was to get transparency and visibility and a contract model that worked. We could not have done the work we've done under a fixed price model. I can assure you that $4 billion would be $20 billion and we'd be in court and the project would not be moving forward. uh we have a a a very rigorous cost verification process. We have a number of independent experts embedded within the contractor's team and our own team. We are adding uh independent advice to the snowy board.
>> What have you done to reduce the risk? >> That's what the biggest thing in this
project. So unfortunately once the project was sanctioned and you started digging holes and drilling tunnels you sort of lost the opportunity to do broad geological surveying.
>> Can't you do that ahead of the drilling machines to at least clarify that?
>> So for the areas that we are concerned about so Florence the famous Florence is currently uh ahead of a naturally occurring asbestous zone and there's a drilling ahead of the machine to deal with that. uh TBM Monica who will traverse the long plain fault zone has subsequently had full length of the drive uh geological uh surveying. So that's the full couple of kilometers where we think this zone is tricky. Uh the new tunnel boarding machine that we acquired to deal with the long plane falls on which by the way would not have been a decision you would make under a fixed price contract. you would have let poor old Florence get there and fail and have many years of delay. TBM Monica uh has got the most advanced uh advanced probing technology along with dewatering technology to prepare the ground ahead. So there's a lot of governance uh oversight and physical things we've done on the ground uh to assure ourselves that we can get this job continuing to move. The team in Snowy that's responsible for this uh at the time of reset was maybe 30 or 40 people. I now have 200 people embedded on this
>> What's the net present value now of this
>> So we we haven't released a business case at this point because the job to date was to get the uh advice to government to work out the subsequent support. a range of economic modeling both on the cost range and the return range and that will inform the government's support over the next few months. What will it
cost total? I think it's now $22 billion estimated plus contingencies. Um and what will it save per year with the minuscule amount of electricity it's
Snow Eye 2 does a number of things. So the first thing it does is it absorbs excess renewables. And I think if you read some reports out of the UK recently about the massively escalating cost of what they call turnown payments. So when a wind farm or a solar farm can't produce because the demand's not there because the
>> which we told everyone about.
>> Yeah. Yeah. So Snowy 2 is fantastic. uh absorbing that excess production. So that allows six to 7,000 megawatts of wind farms and solar farms to be uh developed. So that's point number one that brings cheap energy to the grid. Uh point number two, the snowy snowy 2 then stores that energy for periods when demand is higher. So you know in the evening but more importantly for snowy too when we get those uh times when we get two or three days or up to a week of low wind and solar production uh the grid does not solve without snowy too in those circumstances. It then provides system strength services. So when the big coal plants retire and the big spinning machines are not there snowy too will provide that service. And then in addition to that uh the effect on wholesale prices is to reduce those uh because we are not bringing on what might be more expensive gas or overinvesting in batteries and renewables to provide that service. And then the final one which does not acrue to snowy hydro of course is uh the broad economic benefits through the construction phase.